Buying a house with a Judgment against me - Posted by Tommy

Posted by Charles K Clarkson (TX) on January 11, 2004 at 09:49:26:

What about throwing the judgment holders a second on the property?

The second mortgage might have a greater perceived value and you could still use the friend to see if it would fly.

I have a few judgments I don’t think I’ll ever collect. If someone other than the borrower approached me at mid-month (when my resources run low) I’d be mighty tempted to sign them over at a deep discount.

BTW, where are you holding those savings? You might want to keep it away from prying eyes.


Buying a house with a Judgment against me - Posted by Tommy

Posted by Tommy on January 10, 2004 at 11:46:06:

I am looking to purchase a home within the next two months. But because I have two judgments against my name, I do not want the deed to the home in my name. I would rather have the deed in any other name but my name.

But ironically the only way I can purchase this property is in my name only. That is the only way I can qualify for a mortgage. Although I have the two judgments, I can qualify for a mortgage without paying the judgments yet (I know you wonder how , but dont worry about that, just know that I can).

So I can qualify for a mortgage in my name (despite the judgments); and so can only buy the house in my name; but I do not want to HOLD the house in my name. I do not want the judgment holders to put a lien on the house, or to even know that I own, or have any interest in the house.

What I was wondering is whether it is possiblefor me to hold the house in any other name but my name, that is until such a time that I am able to pay off the judgments, then I can transfer the house back to my name.

Is this possible? How can I do this ? What are the step by step procedures ? Someone told me that after buying the house in my name, that I can transfer it to an LLC, but would that not trigger the due on sale clause in the mortgage ? Can this be done without the mortgage holder calling the mortgage ?

I need help. I want to purchase this home NOW, but these judgments have become a dream killer. This is the first time ever that I have been able to put some money together so I do not want to miss this opportunity to put the money in a house. It either that, or I would just hand the money to my judgment creditors, and then go back to square one (that is having nothing, no future).

I am really at my wits end. Somebody, anybody please help me !!! A step by step advice on what I should do will be a a saver. Thanks also to this board because I have had this problem for the longest and did not know where to turn.

Please help !!!

Re: Buying a house with a Judgment against me - Posted by gary

Posted by gary on January 11, 2004 at 06:10:35:

pay up, pay off, then grow and prosper with a clean slate

There may be a lot you can do. (long) - Posted by Dr. Craig Whisler

Posted by Dr. Craig Whisler on January 10, 2004 at 19:05:26:

Tommy, it doesn’t matter that you can transfer the house into a trust after buying it in your name. If the judgments are recorded with your county recorder, parish, etc. they will automatically attach to any real property that you buy subsequently IF the deed is recorded. The property will have liens on it for the two judgments the minute you record your deed so a trust won’t help you out.

If I had some more information on the judgments I could give you more helpful suggestions. If you don’t want to answer this on the board just send me an e-mail.

If the judgments are not yet recorded you could buy the property and then transfer it to a trust but that still wouldn’t help you much. When your two judgment creditors later learn of this from the county records they can subpoena your trust trustee into court and have him reveal your ownership, then possibly get a charging order or other writ to attach the house. If your creditors get that far they could then have your local sheriff or equivalent, hold a sheriff’s sale to satisfy the creditors liens. A trust will still not protect you from this usless it is an irrevocable trust under which you have already given up your property and no longer own it.

Whether or not your judgments are recorded they will usually expire or their owner’s rights to take affirmative action to collect them after a certain period of time, will expire. I think it is about 10 years in California if the creditors don’t go to court to have their judgments renewed for another 10 years (this can be done indefinately but rarely is). If you can’t wait 10 years then explore the next alternative below.

A judgment is personal property and as such it can be bought and sold between willing parties at whatever price can be agreed on. It is common for judgments to sell for as little as 5-10 cents on the dollar in some cases. An example of judgments that probably could be bought for such steep discounts are judgments that are to small to warrant much effort to collect. Another example would be judgments that are near their time limit for expiration. Judgments that have very little probability of being collected also sell for steep discounts. You can’t collect judgments against folks who are judgment proof. If the debtor has no (visible) assets the judgments would also be nearly worthless on the open market. If you have a judgment against someone who is on welfare and social security and has no non-exempt asssets such judgments might be worth only a nickle or dime on the dollar. If you don’t own a house yet, you may be nearly judgment proof if you are not working and own no other assets (in your name).

I’m telling you all of this for a reason. You or someone else can make an offer to buy those judgments at a very steep discounts. If you come into ownership of the judgments either directly or indirectly through someone else, you can then record a satisfaction of judgment and clear your own record, thereby freeing you to purchase real property you want in your name.

There is one problem with trusts, if you need a lender to purchase the property to put into them. The property must generally be purcahsed in your own name first, as you have learned. Then when you transfer it from your name to a trustee, it leave a paper trail pointing to you.

I agreee with the others, you should pay your just debts. That isn’t to say that all juddgments ought to be paid if they were obtained unfairly. If you feel you morally shouldn’t have to pay them them I suggest you have a friend try to buy them on the cheap to cancel them out at nice discounts.

I often maintain a selection of tax-sale lots that I have purchased very cheaply, that usually have assessed values of 5-10 times their costs. I use such lots to sometimes trade for judgments against proerties that I want to buy. In this way I have from time to time been able to buy property for as much as 90-95% discount over actual value. It is very common to get 30-40% discounts this way. Do you have something that you could trade for deeply discounted judgments (through a friend). Remember you can’t reveal your ownership of such assets to the judgment creditor or he will try to get a writ of attachment issued and executed by your local sheriff. The sheriff can then seize such assets if they are not exempt by stature in your state and hold a public sale giving the money obtained to the judgment creditor who starts the process. Such assets need to be ‘conviently’ in your brother’s name to do this in order to protect you from this happening.

As a final thought, depending on your negotiationg skill, you might work out a written agreement (contract) for you to pay off your judgments on an installment basis. If such a contract is written up and signed by everyone, it would prevent your creditors from executing on your property as long as you keep your payments up. You might even be able to negotiate a little discount and a ‘no interest’ clause into such a deal because the creditors are getting nothing now and something may be better than nothing. Be sure to try to buy the judgments at a discount first and consider this payment arrangement as your second choice.

You may be able to borrow more that the purchase price of your home if you can negotiate a low enough price, and use the extra money to satisfy the judgments in one way or another, perhaps combining a number of the methods outlined here.

Go through the county records and check to see if your judgment creditors have any judgments against THEM. If so maybe you could negotiate to buy THOSE judgments at a nice discount and use them at full face value, just like cash, to satisfy your judgments. I probably have missed more options than I have told you about so if you have any more questions just ask away.

To other folks reading this post, I would suggest you learn some of these methods because a lot of property for sale and especially property in foreclosure, may have judgments against the owner OR 2nd, 3nd TD holders. If you can buy these any of these judgments at discounts you can use them at full face value to pruchase the house or T.D.s, or at least get a big discount on some of them. Super deals can be obtained whenever there are judgments against ANY of the parties in a transaction. LOOK for judgments and consider them as oportunities to make high value profits.

You can locate such judgments, easily, by going through the records at your county recorder’s office. They are open to the public and often are computerized. Some people make a good living do nothing more than buying and collecting on judgments.

Its fun top snoop through other people’s private financial records and see who is always being sued or who never pay their debts. You may find judgments against your worst enemy. Yopu should check people out this way before selling them your mobiles and financing the balance. Judgments obtained in court but not recorded at your county recorder’s office will usuall NOT appear in credit checks. You need to learn to do your own research.

Think of all the fun you could have if you bought your worst enemy’s judgments, at big discounts, and could force him or her to make you rich by paying you off at full face value.

You don’t normally need a license to do this if you actually buy the judgments outright before you attempt to collect them. If you try to collect judgments owned by others, for profit, then you will need a debt collector’s license.

Improper debt collection practices can carry heavy financial penalties, so it is a good idea to get a debt collection book or two and study up on proper collection practices before you get too heavy into this field.

I spent a couple of years as a debt collector, back during my law shchool years. I learned how to collect under difficult circumstances and I learned how dead beats and folks smarter than me, can so easily foil creditor collections efforts. I learned what it takes to become judgment proof. It helps to learn the skills on both sides of the fence.

I think some of you were a little hard on Tommy. I was young once too and I had to overcome the same obstacles he faces now. His plea for useful help seemed sincere. Many of you prejudged him without knowing his full circumstances. Moralizing is fine but I don’t think it helped him very much. How about if we encourage him to overcome his problems, honorably, and go on to become a successful mobile home investor instead of kicking him when he is down?

Regards, doc

Re: Buying a house with a Judgment against me - Posted by Dave Fl.

Posted by Dave Fl. on January 10, 2004 at 15:06:00:

Stand UP. Be a Man. Pay the Judgements.

Re: Buying a house with a Judgment against me - Posted by Edward Beheler (IN)

Posted by Edward Beheler (IN) on January 10, 2004 at 14:55:06:

Here’s an idea: Use the money that you’ve put together to start satisfying the judgements against you.

Re: Buying a house with a Judgment against me - Posted by Dan - GA

Posted by Dan - GA on January 10, 2004 at 12:08:36:

Most of us here, in one form or another, are in the business of holding notes for people on things we have sold to them. What you’re asking for is help on how to hide the fact that you have an asset from two other people that have already put their trust in you and you have already failed them. I could be wrong, but I don’t think you’re going to get a lot of sympathy or creative help from this group.

Have you thought of being upfront with the people and telling them that you’re getting your act together, you need a place to live, and that you’re working on a solution for them as well. If it’s true, it might just work.

Re: There may be a lot you can do. (long) - Posted by maryellen

Posted by maryellen on January 11, 2004 at 13:24:13:

I agree with you doc, people are being a little harsh on this subject. We don’t know the reasons behind the judgements. Maybe it was things out of his control.

A friend of mine ran into problems when she was taking care of a disabled relative. Her name was added on to her relative’s accounts, rather then just as Power Of Attroney, so that she could take care of things, like banking, picking up medications and so on.

The problem came when her relative passed away. A few of the creditors were understanding and wrote off some of the smallers debts, but others just removed her relative’s name and started collections against her personally which ruined her credit.

There was not enough life insurance or money in the deceased relative’s estate to cover these outstanding debts, so she ended up stuck. She had very good credit until this happened.

I feel bad for her because she did a good thing trying to take care of a family member who was ill, but she inherited a lot more problems than she ever imagined.

So, moral to the story here is that if you don’t know the circumstances, you shouldn’t be so quick to judge a person. Yes, people’s just debts should be paid, but there are cases where it isn’t always possible to do so.